1) Climate change and what to do about it. Judging from what the surrogates said, Romney has no plans to address climate change if elected, apart from funding some basic energy research. Obama, meanwhile, isn’t planning to propose any new policies for carbon emissions if they’ll just get rejected by Republicans in Congress. Instead, Obama would likely focus on strengthening the EPA’s existing climate rules.

Here’s the key quote from Cass, who was asked whether Romney would try to persuade other Republicans to find ways to reduce greenhouse-gas emissions:

Quote:

Well, I think, frankly, that that’s not where Governor Romney would put his emphasis. You know, I earlier in the discussion, when initially asked about whether that should be a focus for government policy, just said no. You know, advanced technologies with respect to coal and other fossil fuels are absolutely important, as are advanced technologies in the renewable space, and Governor Romney believes that investment should focus across all of them. So in that respect, these are all things that would receive his attention. But with respect to a legislative agenda, moving forward, climate change would not be at the top of it.

And here’s Aldy, the Obama campaign’s surrogate:

Quote:

So there’s this challenge that one sees, is that whatever the president puts forward, the Republicans know that their position is the opposite of what he’s supported. Now he thinks that it’s going to be important to advance clean energy technologies and reduce carbon emissions in the power sector, but to be candid, if we’re going to make progress on this, we’re going to need some kind of work with Congress…

And if we can’t actually get agreement on something that is more effective long term, market-oriented, with Congress, the president will continue to use that authority under the Clean Air Act to try to actually reduce our emissions.

2) The role for government in funding new technologies. As we’ve seen before, Romney is basically in favor of having the government fund basic scientific research, but he doesn’t think the government should be nurturing young, unproven energy companies (like Solyndra) — he’d leave that to the private venture capitalists.

At the MIT debate, Aldy didn’t defend the stimulus investments directly. Instead, he pointed out that the government has often helped nurture companies beyond the basic research stage. That was the case with shale gas, which is now upending the energy industry:

Quote:

Now it’s interesting, when we think about the revolution going on now in energy in the United States, and we talk about the fracking revolution with natural gas, we actually had a public/private partnership with [the U.S. Department of Energy] in the late 1970s to test out shale gas technologies, the Eastern Shales Gas Project. We then had, for about 20 years, a production tax credit for unconventional gas to create the incentive for the private sector to try to bring these technologies to a stage where they can be competitive.

Cass, for his part, countered that the government’s contribution in shale was fairly cheap in the grand scheme of things and something that Romney would support:

Quote:

According to the Associated Press, that investment amounted to approximately $100 million over the course of 30 years, or approximately $3 million a year. Now that’s the sort of investments in research, in demonstration, that can come out of a program like ARPA-E [Advanced Research Projects Agency - Energy] and that Governor Romney would support. The entire investment over the — in the program over the course of the three decades is about a fifth of what we wasted on Solyndra. And so when we’re thinking about where we want to target our investments, I think it’s important to look at those returns.

Are the two talking past each other here? Perhaps. Aldy’s point seems to be that the government often needs to go beyond simply funding basic research in order to develop new energy technologies. Government support for shale gas also included demonstration projects and $10 billion in production tax credits, the sorts of policies Romney says he opposes. Cass is suggesting that Romney might support those things if they’re successful and well-targeted. But, of course, it’s hard for the government to know beforehand which technologies will pan out.

3) Energy efficiency and vehicle fuel-economy standards. Romney has criticized the Obama administration’s new fuel-economy standards as “extreme,” and Cass gave a little more insight into why the Republican candidate is so skeptical. Basically, Cass doesn’t think that fuel-efficiency standards will truly save consumers money:

Quote:

He says, well, we’re going to cut the price of gas in half for a family. Frankly, an American family that had that opportunity I think would take it. The reason they don’t want to take it is because the cost of that car up front is going to be an extra as much as $5,000.00 or $10,000.00. And so there’s sort of a car salesman trick here of telling you about the benefit without telling you the cost. But if we actually have technologies that are going to increase efficiency, the market will actually bring them forward without the government telling you you have to buy them.

Cass is arguing that if Americans could actually save money with more-efficient vehicles, they’d just buy the cars and there’d be no need for a government regulation. Aldy, by contrast, takes the view held by some economists that there’s a market failure at work here — consumers aren’t very good at calculating fuel savings, so a government mandate for more-efficient cars really does save people money in the long run. But Aldy doesn’t argue that point explicitly.

4) The benefits of oil independence. Aldy argues that greater oil production in the United States won’t necessarily shield us from swings in oil prices:

Quote:

We can actually increase our production. We’re going to do that. But… [it] doesn’t matter even if we go all the way to zero in terms of our net imports. If we’re still operating in a world oil market, we’re going to be seeing some risk. You know, you can look at Norway, for example. They’re a net energy exporter, big oil and gas producer. They see their gasoline prices go up when the world price of oil goes up.

Cass, by contrast, points out that “the energy we get from Canada is significantly cheaper, because we are currently their only consumer.” That’s true for oil from Canada, mainly because there’s not enough pipeline infrastructure to export the resulting gasoline and diesel to the rest of the world. So there’s currently a glut of oil in the Midwest. If, however, that infrastructure did get built, as Romney is proposing, then oil from Canada would cost closer to what oil in the rest of the world costs.